Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
FTC considering designating Dunamu, Bithumb as large business groups
A person passes by an electronic board of Bithumb in Seoul, Mar. 17. The chart shows a real-time price of bitcoin. Yonhap
By Lee Min-hyung
By Lee Min-hyung
The Fair Trade Commission (FTC) reportedly plans to designate two major cryptocurrency exchange operators as large business groups.
The commission imposes such regulations on companies whose asset volume tops 5 trillion won ($4.1 billion) by May 1 of each year. Those designated as such are subject to tighter regulations from watchdogs especially when they make investments.
Local media reported that the FTC considers designating Dunamu ― the operator of Korea's largest crypto exchange Upbit ― and Bithumb as large business groups. But the method of calculating their total assets has triggered controversy due to ambiguous laws on the industry here.
According to data from Rep. Kang Min-kook of the main opposition People Power Party, the total assets of Upbit and Bithumb came in at 42.97 and 11.62 trillion won, respectively, when customer deposits are included. But after deducting customer deposits, their asset size does not exceed 5 trillion won.
Industry sources said that the dispute arose due to the unclear legal standard on the calculation.
“Conventional financial firms in the industries of banking or insurance do not include customer deposits when calculating their total asset volume,” an industry source said. The source added that while it appears strange that the rule is not applied to crypto exchange operators, industry players are taking a wait-and-see approach before receiving clear responses from the watchdog as nothing specific has been confirmed on the issue so far.
The watchdog will be able to designate the exchange operators as large business groups only when they are not legally recognized as financial companies.
Officials from the two exchanges declined to comment on the details of the issue, saying that nothing specific has been confirmed as of now.
“We are going to fulfill our responsibility in accordance with the law,” an official at Dunamu said, declining to comment further.